The only good thing to say about the textile bill that passed the House recently is that the margin fell short of the two-thirds needed to override an almost certain presidential veto.
In all other respects the bill is a disaster. It would expand three decades of protectionism, keeping U.S. apparel prices high and undermining global trade negotiations now nearing completion in Geneva.The bill, which would apply quotas to new items and make existing protections permanent, would badly hurt consumers, particularly at lower income levels. During the next five years, such textile protection would cost $160 billion, taxing every family of four about $2,600 a year.
What's more, the added protection is unnecessary. Economic indicators show that the U.S. textile and apparel industries are doing well.
Domestic shipments were up 7 percent and exports were up 27 percent in 1989. Factories are running at an all-time high; a higher rate, in fact, than the average for all U.S. manufacturers.
Worst of all, the legislation would violate our international commitments under the General Agreement on Tariffs and Trade (GATT), the Multifiber Arrangement and individual agreements with 38 of our trading partners.
Thus, at the very moment we are seeking to forge an historic alliance to confront Iraqi aggression, we are telling our allies that the United States is willing to ignore its international obligations. Indeed, the bill would violate recent agreements with Turkey and Egypt, two countries indispensable to our international efforts in the gulf.
Approving such protectionist legislation after 31/2 years of negotiating to open world markets will be seen as the height of hypocrisy - in essence saying to the world "Do as we say, not as we do."
In Geneva, where negotiators are in the final stages of the four-year Uruguay Round of talks on a new GATT, we are urging all nations to open their markets so that trade can expand. But on the verge of completing this agreement to open others' doors, we are closing our own.
If the bill were to become law, the Uruguay Round could collapse, with staggering economic costs.
We would lose the $125 billion in increased U.S. output we expect to gain in the first year alone from greater access to foreign markets. The $60 billion that U.S. entrepreneurs lose annually from the theft and counterfeiting of their ideas would continue to grow out of control.
New markets would be lost for U.S. services firms, which export $90 billion annually and create 9 out of 10 jobs. We would lose the opportunity to get an agreement opening world markets to investment, which helps generate more than $240 billion annually, or two-thirds of total U.S. exports. And we would lose the chance to bring the developing world into the global trading system, which could increase U.S. exports by as much as 50 percent, or $200 billion, between now and the year 2000.
Beyond the economic tragedy of a failed Uruguay Round, we would squander a vital, proven framework of international collaboration. The collapse of the round would lead inevitably to increased protections and political instability.
Failure to come to an agreement also could destabilize poorer nations, including the emerging democracies. Without an agreement these nations will continue to be drained by the costs of protections now imposed on them - costs that total 2.5 times the aid they receive.
The Uruguay Round presents 100 nations with the extraordinary opportunity to forge a new trading system that could trigger an economic renaissance. The 1990 textile bill risks all that.
(Carla A. Hills is the U.S. trade representative.)